Better Medicare Alliance Responds to Energy and Commerce Oversight Subcommittee Hearing on Medicare Advantage
by Mary Beth Donahue
Today the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations held a hearing on Medicare Advantage, entitled “Protecting America’s Seniors: Oversight of Private Sector Medicare Advantage Plans.”
Lawmakers were nearly unanimous in recognizing Medicare Advantage’s value to seniors and the importance of its flexible benefit design. Chairwoman Diana DeGette (D-CO), for example, noted that Medicare Advantage is “popular” with beneficiaries while adding that the purpose of the hearing was to “help the program succeed.”
Likewise, Ranking Member Morgan Griffith (R-VA) explained “Medicare patients who choose Medicare Advantage are able to cap their personal financial liability and enjoy a wide range of supplemental and personalized benefits in exchange for some utilization management and network controls.”
Still, some outdated assumptions and claims that lacked context resurfaced as lawmakers and witnesses shared their views on this coverage lifeline, now chosen by more than 28 million seniors and individuals with disabilities.
In this blog post, we consider some of the statements made at today’s hearing and weigh those against the latest research and data from Better Medicare Alliance and other sources.
Claim: “Medicare spends more for an enrollee in MA than it would have spent had that beneficiary remained in FFS” – James E. Matthews, Ph.D., Executive Director, MedPAC (source)
Context: Payment to Medicare Advantage relative to FFS Medicare was discussed at several points in today’s hearing. Importantly, an October 2021 actuarial analysis from Milliman found that per-member, per-month spending in Medicare Advantage is nearly $7 lower than per-member, per-month spending for beneficiaries of a similar health status in FFS Medicare. The authors of the report go on to conclude that “the federal government pays less and gets more for its dollar in MA than in FFS [Medicare].”
Further, any holistic comparison of spending between Medicare Advantage and FFS Medicare must consider savings for the consumer, in addition to the government. Medicare Current Beneficiary Survey (MCBS) data shows that Medicare Advantage beneficiaries save nearly $2,000 per year on premiums and out-of-pocket costs compared to those enrolled in FFS Medicare. Better Medicare Alliance explains this data in greater detail at our new website, MedicareAdvantageFacts.com.
Claim: “Several studies have raised concerns that some beneficiaries enrolled in MA plans are not receiving timely, medically necessary care and that delayed care can negatively impact beneficiaries’ health” – Committee memo (source)
Context: This claim refers to an April 2022 Office of Inspector General (OIG) report which calls into question 33 denials of prior authorization requests during a single week in June 2019 – an extraordinarily small sample given the more than 28 million Medicare Advantage beneficiaries – to make broad conclusions about Medicare Advantage practices.
Prior authorization has a legitimate role to play in coordinating beneficiaries’ care. As research published in JAMA explain, “the rationale for prior authorization is to identify and discourage costly low-value services, thereby reducing health care spending without impairing health care quality.”
Data suggests this is working: reports show that Medicare Advantage beneficiaries save an average of $1,965 per year in total health expenditures compared to FFS Medicare, even as Medicare Advantage beneficiaries see lower avoidable hospitalization rates, fewer readmissions, higher rates of preventive care and screenings, and a lower COVID-19 mortality rate, compared to FFS Medicare.
Importantly, a June 2021 poll of seniors on Medicare Advantage shows that less than half of seniors on Medicare Advantage say that they have ever encountered a prior authorization themselves and only 6% of seniors on Medicare Advantage say they have encountered prior authorizations “often.” Even among the minority of Medicare Advantage beneficiaries who have encountered prior authorizations, 66% say it imposes “no burden” on their health care experience.
Likewise, a 2022 eHealth survey of more than 2,800 Medicare Advantage beneficiaries found that a combined 87% of respondents had either not experienced a prior authorization denial or were unsure. Of those who had experienced a prior authorization denial, results showed that “many … were declined for things like dental and vision care, which aren’t typically covered by Medicare.”
Better Medicare Alliance has joined with others in the Medicare Advantage community to endorse the bipartisan Improving Seniors’ Timely Access to Care Act which would build on health plans’ work to modernize the prior authorization process.
Claim: “MA beneficiaries in the last year of life disenrolled to join traditional Medicare at more than twice the rate of all other MA beneficiaries” –Leslie V. Gordon, Acting Director, Health Care, U.S. Government Accountability Office (source)
Context: Several lawmakers and witnesses expressed concerns about reports on rates of disenrollment from Medicare Advantage in the last year of life, but this lacks key context. Namely, hospice care – which is often sought in the last year of life – is not widely covered in Medicare Advantage because lawmakers carved hospice services out of the program’s benefit design. This carve-out creates confusion among beneficiaries as well as providers because, while beneficiaries may remain in Medicare Advantage with FFS Medicare covering hospice-related services, many beneficiaries are unaware of this option and disenroll either intentionally or passively even if they are highly satisfied with their coverage. Fortunately, this is beginning to change. A Center for Medicare & Medicaid Innovation (CMMI) demonstration project supported by Better Medicare Alliance that began in 2021 allows Medicare Advantage to test offering hospice care in all 50 states.
Medicare Advantage recognizes that end-of-life care is not exclusive to hospice and has increased the number of intermediate benefits and services offered to beneficiaries and may be used during the last year of their life. For example, the number of health plans offering home-based palliative care benefits grew 143% since 2020, while in-home support service benefits grew 267%.
Finally, of note: research from Milliman shows that the average age in Medicare Advantage is slightly higher than FFS Medicare (71.5 years in Medicare Advantage compared to 71.3 years in FFS Medicare).
Claim: “With one exception, racial and ethnic minority MA beneficiaries reported experiences with care that were either worse than or similar to the experiences reported by White beneficiaries.” – Committee memo (source)
Context: While Medicare Advantage is not immune from racial disparities that are systemic throughout our health care system, and while it is clear that more work remains to be done, a December 2021 report commissioned by the Centers for Medicare & Medicaid Services (CMS) and conducted by RAND shows “substantial progress in the reduction of inequities in the patient experience for Black beneficiaries” and “substantial improvement for Black and Hispanic beneficiaries in the area of clinical care” over the past 10 years.
Data also shows us that minority beneficiaries choose enrollment in Medicare Advantage at higher rates than the overall population. 53% and 49% of Hispanic and Black Medicare beneficiaries, respectively, choose enrollment in Medicare Advantage, compared to 45% of the total Medicare-eligible population.
Prominent minority groups have long heralded Medicare Advantage’s work to advance health equity. For example, a January 2022 letter from the National Hispanic Medical Association, National Medical Association, and Asian & Pacific Islander American Health Forum explains, “Our organizations share in the [Biden] Administration’s goal to improve health equity, and believe MA is critical to achieving that goal … To build on the progress already made to improve health outcomes and advance health equity for seniors in MA, we must protect MA from any payment reductions or policies that would negatively impact seniors in MA.”
Claim: “[There are questions as to] whether MAOs use health risk assessments primarily as a strategy to submit more diagnoses to increase payments rather than to improve the care provided to their beneficiaries.” – Erin Bliss, Assistant Inspector General, Office of Evaluation and Inspections, HHS Office of Inspector General (source)
Context: Health risk assessments (HRAs) are a valuable clinical and data collection tool to deliver personalized, patient-centered care. What’s more, CMS requires that Medicare Advantage health plans make a best effort to conduct a health assessment annually.
Many HRAs are conducted in the home by a licensed clinician. These visits play an important role in identifying gaps in care, referring to local service organizations, and improving health outcomes. By way of example, one in-home assessment service explains their HRA process as a 45-60 minute visit consisting of a physical exam, health screenings, and lab tests as appropriate; resulting in a double-digit decrease in hospital admissions.
Research shows that Medicare Advantage delivers a 43% lower rate of avoidable hospitalizations compared to FFS Medicare, a lower rate of hospital readmissions, and higher rates of preventive care and screenings. HRAs have an important role to play in driving these better outcomes. Better Medicare Alliance has encouraged CMS to help improve understanding of this clinical tool by codifying HRA best practices. Read more about HRAs in our new fact sheet here.
Claim: “Beneficiary risk scores have grown faster under MA than traditional Medicare … [resulting in] inflated payments to MA plans” – Committee memo (source)
Context: Medicare Advantage now enrolls a proportionally more medically complex, lower-income, and at-risk beneficiary population that FFS Medicare. It is appropriate and unsurprising that these changing dynamics would be reflected in Medicare Advantage risk score trends, Consider, for example, that enrollment in Medicare Advantage among beneficiaries who are dually-eligible for Medicaid increased 125% from 2013 to 2019, even as it decreased in FFS Medicare.
Medicare Advantage beneficiaries today are more likely to self-report having three or more chronic conditions, more likely to be food insecure, more likely to self-report diagnoses of diabetes, COPD, congestive heart failure, or dementia, and more than a quarter of them say they need help with one or more instrumental activities of daily living (IADLs).
This is also affirmed in independent research from Avalere Health, which reports that “Medicare Advantage has a higher proportion of patients with clinical and social risk factors shown to affect health outcomes and cost than FFS Medicare.”
Claim: “MA star ratings are obfuscated by measures that lack value … fundamental flaws in the way quality is being measured and reported means there is no meaningful way for policymakers or beneficiaries to compare MA plans to each other” – James E. Matthews, Ph.D., Executive Director, MedPAC (source)
Context: Medicare Advantage plans are held to strict quality standards through CMS’s Star Ratings program, which, as CMS explains, provides “meaningful information about the quality of each plan” based on up to 38 quality measures. For 2022, a record-setting 90% of beneficiaries in Medicare Advantage Prescription Drug (MA-PD) plans are enrolled in 4- or 5-star plans. The average Star Rating across MA-PD contracts for 2022 rose to 4.37, up from 4.06 in 2021 and up from 3.18 in 2011.
A CMS fact sheet shows that average Star Ratings for quality measures like “getting needed care,” “customer service,” “rating of health plan,” “getting appointments and care quickly” and “care coordination” all reached their highest levels in the last four years. This comports with separate research on Medicare Advantage quality from Avalere Health which found higher rates of preventive care and screenings and lower rates of avoidable hospitalizations when compared to FFS Medicare.
Medicare Advantage beneficiaries have also weighed in with their own thoughts on Medicare Advantage quality, giving the program a 94% satisfaction rate in a December 2021 Morning Consult poll.
Claim: “MAOs may also limit beneficiaries’ access to care to a network of physicians, hospitals, and other providers that contract with an MAO” – Leslie V. Gordon, Acting Director, Health Care, U.S. Government Accountability Office (source)
Context: A December 2021 Morning Consult poll found that 95% of Medicare Advantage beneficiaries are satisfied with their network of hospitals, doctors, and specialists. The same poll shows that nine in ten beneficiaries agree that Medicare Advantage “lets them see the doctors they want on their own terms.”
Likewise, a 2022 eHealth survey of more than 2,800 Medicare Advantage beneficiaries found that 86% would recommend it to others. When asked why, the number one answer in the survey was “It covers my preferred doctors, hospitals, and pharmacies” (cited by 51% of respondents).
These findings track closely with the latest MCBS data which shows that 95.6% of Medicare Advantage beneficiaries are satisfied with the ease of seeing their doctors.
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Looking ahead as Congress continues its work to strengthen Medicare, Better Medicare Alliance will remain a resource to lawmakers and staff and a steadfast advocate for each Medicare Advantage beneficiary.
As Energy and Commerce Committee Chairman Frank Pallone (D-NJ) explained today, “America’s seniors expect and deserve high-quality health care, and we must ensure that is what they are receiving.” We agree, and we will continue to build the evidence of how Medicare Advantage is accomplishing exactly that.
Mary Beth Donahue, MPP is the President and CEO of the Better Medicare Alliance.
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